Concepts

free market: An structure in which the price is directly controlled by the law of supply and demand, in which the government doesn't interfere.

law of supply and demand: The law of supply and demand refers to the increase or decrease of the price depending on how much you have of a "something" and how much do people ask for that "something."

law of self-interest: It states that even if a person acts for other people's interests, the ultimate interest of that person is its own.

law of competition: Monopolies aren't good for society, because when there is competition the different parts want to improve their quality or decrease prices, but when there is only one part they can be lazy on quality and establish the price they want.

the invisible hand: E

ach individual strives to become wealthy "intending only his own gain" but to this end he must exchange what he owns or produces with others who sufficiently value what he has to offer

contract: A legal document that establishes that a trade has been made, which must be signed by both parts.

free trade: When a person or company is allowed to trade with other countries without the need of paying taxes or having quotas.

balance of trade: The balance between the imports and exports, or between costs and profits.

zero-sum game: It refers to when the wins and loses of a trade are exactly the same, so there's no progress nor lost.

protectionism: An economic posture for protecting the country's economy by applying tariffs and quotes to international business.

embargo: When trade with an specific country is totally or partially prohibited by the government of another country.

quota: Putting a limit to the quantity of international trade.

tariff: A special tax applied for importing goods from other countries

comparative advantage: The ability of a party to produce a particular good or service at a lower marginal and opportunity cost over another.

trading partner: One of the participants in a business ongoing relationship.